CERTYNEX IFRS ACADEMY

The plan of Devane SA is subject to a minimum funding requirement of 150,000 per year: 90,000 for future services, and 60,000 to clear an existing minimum funding shortfall in respect of services already rendered. The annual future service cost under IAS 19 is 100,000 (case data). Which conclusion on the benefit available as a reduction in future contributions is correct?

The available benefit is reduced each year by 60,000, the amount of the contributions that clear the existing minimum funding shortfall in respect of services already rendered by employees.

The available benefit is reduced each year by 150,000, all the minimum funding contributions required by the plan.

The available benefit is reduced each year by 10,000, the difference between the future service cost (100,000) and the contributions required for those services (90,000).

The contributions for future services (90,000) do not exceed the future service cost (100,000): they do not reduce the benefit; the 60,000 catch-up does not affect it.